Arnold’s book: Questions The Governator did not answer

Here are five (admittedly wonky) questions that I wish Arnold Schwarzenegger had answered in his new book – and how he missed the boat on each.

1. What are the inside details of the process that led to the passage of AB 32, the state’s limit on greenhouse gas emissions? This would have been interesting for two reasons, first as the historical story of landmark legislation, second because the bill belies the frequent claims that California’s system of governance is so broken it can do absolutely nothing at all. Here is a case where the state not only acted, but was first to act. So how did it happen?

Schwarzenegger portrays the bill as merely the result of a natural evolution after his disastrous 2005 special election. Following that rebuke by voters, as he tells it, he apologized for loading too many policy choices onto the public, followed through on his promise to work better with Democrats, and – voila – AB 32 emerged from the policymaking womb. His description of the negotiations is compressed into a few sentences that are so bland as to be laughable: “Building a consensus was very hard. … There were fierce disagreements internally and with legislators and interest groups. But we dealt with those disagreements by listening to one another and debating the merits.” And then by holding hands and singing Kumbaya.

2. In 2009, Schwarzenegger and the Legislature raised taxes as part of a budget-balancing deal. A handful of Republicans agreed to vote for the bill, meaning that the governor effectively overcame the two-thirds requirement that stymied Gov. Jerry Brown last year and thus forced the issue to the voters this November. The 2009 deal also led to the adoption of the top-two elections system. How did this deal come about? In light of it, what does Schwarzenegger think about the minority-veto system that continues to govern California’s fiscal life?

Schwarzenegger mentions that the Republican leaders who helped negotiate the deal – Dave Cogdill and Mike Villines – were punished by their own party, but, weirdly, the book completely omits the name of Abel Maldonado, who produced the final vote after Democrats agreed to put the top-two system on the ballot. What’s more, the former governor’s account of the negotiations is, like that of AB 32, utterly useless historically:

“When we were in late-night negotiations, sometimes I would remind myself that this was nothing compared to being up to my neck in freezing jungle mud in Predator or driving a Cadillac down stairs in The 6th Day. And I’d think how budget negotiations are no different than grueling five-hour weight-lifting sessions in the gym.”

3. The state budget is far too constricted by ballot-box budgeting, a point Schwarzenegger acknowledges in the book (for one example, see page 578). But he contributed to this problem by pushing Prop. 49 in 2002, which set aside money for after-school programs. After he became governor and struggled with the effects of ballot-box budgeting, did Schwarzenegger ever regret his own contribution to the problem? How might we attack this issue in the future?

The discussion of Prop. 49 is entirely focused on its political role in creating a statewide campaign vehicle for Schwarzenegger, a precursor to what was then only a potential run for governor. His justification of Prop. 49’s failure to provide a funding source turns on a weak analogy to excessive public-employee pensions. The pension problem was caused by overly optimistic investment assumptions, not inflexible formulas. Sure, pension costs eat into the General Fund, but excessive CalPERS optimism is hardly a form of ballot-box budgeting.

4. The state’s tax system is highly volatile, relying heavily on income taxes paid by rich people while artificially suppressing our reliance on the far more stable property tax. Some would defend this structure. Liberals might say rich people can afford to pay. Conservatives might say that Prop. 13’s cap on property taxes protects average homeowners. Others say that our revenue structure is far too volatile and exacerbates the effects of economic swings, forcing draconian budget cuts when times are bad and encouraging spending sprees when times are good. As the state’s chief executive, did Schwarzenegger find this fiscal volatility a problem? If so, what would he suggest we do about it?

Schwarzenegger says he was aware of California’s bouncing-ball fiscal picture even before he was elected governor, but he attributes this to the “boom-and-bust nature of California’s dynamic economy,” rather than conscious policy choices. And while he insists that he advocated the creation of a tightly locked rainy day fund to save money, he fails to mention that his own decision to slash vehicle registration fees stripped the coffers bare just when the state needed money. One of the difficulties in squirrelling away cash during good times is that Democrats want to spend the windfall, Republicans want to give it back, and voters want both. Schwarzenegger could have admitted that he was part of this problem when he first took office, and could have offered suggestions – if he has any – about how we might create a revenue stream that is more stable, while still maintaining the progressivity that California voters seem to like.

5. Term limits – originally a Republican idea to cleanse the body politic of Willie Brown – are now widely derided for creating a Legislature that is inexperienced and lacks any form of institutional memory. Nor have term limits produced citizen legislators who take a brief respite from everyday chores for a few years of public service. Instead, the system is largely filled with professional politicos who hop from office to office, sometimes trading jobs in the process. As governor, was Schwarzenegger surprised or troubled at the inexperience of many legislators? Or, given his own neophyte status, did he think it was a good thing?

If Schwarzenegger offers an analytical word on this important issue, I cannot find it.

Full-disclosure: I know nothing about the non-political portions of the book. Perhaps they are excellent. Schwarzenegger is inaugurated as governor on page 513 of a 618-page text. I skipped the first 512 pages, because I really don’t care how many times the young Schwarzenegger could lift a Volkswagen. Same for the baby with the maid.

Perhaps it was naïve of me to hope that a book by a politician would contain much substance, but I actually thought that perhaps Schwarzenegger’s memoir would provide useful information. The former governor is plainly a smart man, after all, and he is rich and retired (at least from politics) – excellent preconditions for candor. It seemed a fine opportunity to spill the beans. Opportunity missed.

Able Maldonado should never hold another public office again after voting to pass a tax increase under Arnold. He is a buddy of Arnold’s and was appointed Lt. Governor by him. That’s why he is not mentioned in Arnolds book. Able should just work in the private sector and see how the “common people” live.